India on Wednesday dismissed as "crystal gazing" the latest projection by Standard & Poor's that there was a more than one-in-three chance of ratings downgrade for the country in the next one to two years and asserted there was no such prospect.
Economic Affairs Secretary Arvind Mayaram while giving India's assessment of the S & P projection said the country has taken several measures to stabilise the economy despite the turmoil in the global economy.
He also wondered which mathematical model was relied upon by S & P to come to the statistical conclusion of a potential downgrade.
"I will be interested in really knowing why 33 % and not 32.5 %, It is only crystal gazing. There can be no mathematical model for that," he said in a virtual snub to the rating agency.
"There is no chance of a downgrade," he told reporters accompanying Prime Minister Manmohan Singh on his visit to Russia to attend the eighth summit of the Group of 20 industrialised and big emerging economies at St Petersburg.
Mayaram was asked to comment on the S & P's projection on a negative outlook for India.
At a news briefing in Seoul on Tuesday, Kim Eng Tan, an analyst at S & P, said, "We have a negative outlook on India. We think the chance of a downgrade in the next one two two years is one out of three".
Tan called the chance of a downgrade of India higher than that of Indonesia, where the rupiah fell to a four-year low on Tuesday. Besides a widening Current Account Deficit (CAD) that has hurt India, the rupee has lost one-fifth of its value to a dollar this year.
Stating that the projection should be seen only in the manner in which it has been stated, Mayaram said there is no case for a negative outlook.
Asserting that India has faced situations like negative ratings in the past, Mayaram said India has taken measures and will take measures in the future to the extent possible to stabilise the economy.
He disagreed with a suggestion that domestic factors like lack of structural reforms had also contributed to the stunted growth of the Indian economy.
"There is case for greater reforms, deeper reforms. There is no reason to believe that reforms have not taken place,"he added.
Replying to questions, Mayaram said government is committed to bring down the CAD, which touched a record high of 4.8 % of GDP in 2012-13 to USD 70 billion or 3.7 % of GDP this fiscal.
"We will not breach the red line," Mayaram said referring to Finance Minister P Chidambaram setting out a red line of a 3.7 % fiscal deficit target.
He did not rule out the possibility of the CAD getting even lower than 3.7 %.
A strong agriculture output, growth and increase in infrastructure spending will be among the key factors that will help India enjoy the confidence of international investors, he said.
Replying to questions, Mayaram said there is a lack of consensus in the G20 in areas of infrastructure investment in emerging economies for providing impetus to growth of sustainable economy. The World Bank is expected to give a report in this regard at the G20 summit.
On global trade issues, Mayaram regretted the efforts by some emerging economies to rollback trade-related agreements in movement of services.
"The earlier regime for movement of services should be maintained," he said, adding that India firmly believes there should be no rollback in that position.